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Cancer clinics may send patients to hospitals due to budget cuts

Cancer clinics in Ohio are facing the possibility of having to send Medicare patients elsewhere to receive treatment because of mandatory federal budget cuts.

The cuts of of $85 billion that began March 1 removed two percent from Medicare providers, including money for drug reimbursements.

“This type of cut is into the bone for us, as far as the impact,” said Glenn Balasky, executive director of the Mark H. Zangmeister Center in Columbus.

Many clinics were already losing money on drug reimbursements because of a 2004 law that created a system for reimbursing for Medicare Part B drug prices. That system reimburses doctors for the average sales price of chemotherapy drugs plus six percent to cover the costs of storing and administering the drugs. The budget cuts enacted March 1 would lower that six percent to four percent. And President Barack Obama’s budget, released last week, would lower that four percent to three.

“This is just putting practices in a very precarious position,” said Dave Dillahunt, executive director of the Ohio Hematology Oncology Society. “It’s going to be eye-opening.”

Tom Miller, a resident fellow at the conservative American Enterprise Institute, said that the latest cuts are minor compared to the endemic problems with how Medicare reimburses clinics for drugs. He said the cuts implemented by sequestration are getting attention where other cuts to providers under Obama’s health care law are not.

The sequester, he said, “is having a marginal effect on what is already something that’s been out of balance for a long time.”

“I’m not doubting you’ll find some oncology clinic where they’re squeezed with low marginal rates and any change to what they’re receiving puts them in the red,” he said. But, he said, “it’s not a uniform situation.”

Dayton Physicians CEO Robert Baird said the practice is worried that it may have to eventually send Medicare patients to the hospital for chemotherapy.

“We’ve made the conscientious decision right now not to interrupt patient treatment schedules and treatments and lives and to do the best we can and work as hard as we can to avoid this change,” he said. “But we are monitoring the situation and making plans that if we have to we will shift Medicare patients to the hospital setting for chemotherapy.”

The Zangmeister Center doesn’t want to do anything that would impact patient care, said Balasky. But patients, he said, “are the only voice that will be listened to” by lawmakers.

The center is now losing money on 31 of the 92 medications it uses. Because of that, it will review its chemotherapy regimens and consider sending Medicare patients using the most money-losing treatments to hospitals for treatment. Balasky admits the center is worried that hospitals may not be prepared for the influx of new patients.

“We’re going to be construed as being a bad guy where we don’t want to be that,” he said. “It’s a complicated matter to explain. And yet if we don’t take some type of action then we’re not sending a message back to our congressmen and our senators that this is a problem.

According to the American Society of Clinical Oncologists, the budget cuts will force three-quarters of the thousands of cancer clinics nationwide to start referring Medicare patients to hospitals.

Mark Thompson, president of the Community Oncology Alliance and a doctor at the Zangmeister Center said cancer clinics have seen a “continual drift downward” in reimbursements for cancer payments. But “this one is such an insult that I think personally you’re going to see some national things happen” as a result of the cuts.

He cites a study by actuarial firm Milliman that found that a chemotherapy drug delivered in a hospital setting costs the federal government about $6,500 more annually than it would be if it were delivered in a community clinic. That report indicated that 66 percent of Medicare patients receive treatment in cancer clinics rather than in a hospital.

That same study found that patients treated in a hospital setting paid an average of $650 more out-of-pocket.

Whether Congress will ultimately reverse the cuts remains to be seen. One lawmaker - Rep. Renee Ellmers, R-N.C. – last week introduced a bill that would exempt chemotherapy drugs from sequestration. But it’s unclear whether the bill will move foreward.

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